Having contracted in the previous three months, growth of private sector business activity moved back above zero in mid-quarter. The flash composite output index weighed in at 51.6, up from January's final 49.1 and fully 1.5 points stronger than the market consensus. The latest reading was also a 7-month high.

However, the headline improvement was wholly attributable to services where the flash sector PMI jumped from January's final 49.4 to 52.8, a 5-month peak. By contrast, its manufacturing counterpart dropped from 50.5 to just 47.9, a 4-month trough. Moreover, within this, output (45.9) was especially weak.

Aggregate new orders saw a seventh successive decline, mainly, but not solely, due to manufacturing, with export demand again declining. However, the fall here was not steep enough to prevent a services-driven increase in backlogs and overall employment growth was little changed from the 3-month high seen in January. In addition, although optimism about the year ahead dipped, it was still the second-strongest since July 2022.

Meantime, input cost inflation continued to trend down and, while still historically firm, hit its lowest rate since December 2021. Importantly too, output price inflation also eased from January's 8-month peak.

Today's update bodes cautiously well for first quarter GDP growth which looks on course to beat the meagre 0.1 percent rate achieved at the end of 2022. Nonetheless, the expansion is far from balanced and declining demand in manufacturing remains a major problem. That said, both the French ECDI (16) and, in particular, ECDI-P (33) now stand at levels indicative of moderate outperformance by economic activity in general.

France's composite PMI has been hovering near the 50 line and is expected in February to improve a full point to just above it at 50.1.

The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector business activity by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. The flash data are released around ten days ahead of the final report and are typically based upon around 85 percent of the full survey sample. Results covering a range of variables including manufacturing output, employment, new orders, backlogs and prices are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The data are produced by S&P Global.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.